accelerating execution of aegon americas strategy...helping people achieve a lifetime of financial...

Helping people achieve a lifetime of financial security

Accelerating execution of strategy

Mark Mullin New York City – December 8, 2016

CEO of the Americas

Member of the Aegon Management Board

2

Key messages

• Capital generation of ~USD 1 billion per annum, with growth after 2018

• Strong delivery on expense savings target; doubling 2018 target to USD 300 million

• Achieve return on capital of 9% by 2018

• 5 part plan in place to accelerate pace and exceed expectations

Reaffirming

2018 targets

• On track to deliver original 2018 expense target of USD 150 million in 2017

• Further net reduction of >500 roles announced

• First phase of location strategy implemented – impacting 3 locations

• Strategic decision to close Affinity, Direct TV and Direct Mail channels

Robust

management

actions

• Well positioned for market opportunities with a clear view of our portfolio

• Integrated worksite strategy leverages market-leading capabilities

• Delivering an innovative, digital front-end for retirement plans and employee benefits

• Investing in talent and skills to deliver a flexible, digital capability for the future

Positioned for

the future

3Delivering on 2018 targets

Source: Swiss Re sigma; Census; US Bureau of Economic Analysis

Strategically positioned to capture opportunities

A significant and growing marketplace

>$500bnLargest insurance

market in the world

325mAffluent and

aging population

~6%Personal

savings rate

Well positioned franchise

Integrated worksite strategy

leverages market leading capabilities

Delivering an innovative, digital front-end for retirement plan and employee benefit customers

• Leading wealth &

health businesses

• Offering attractive

products across

channels

• Iconic and

well respected brand


Optimizing position by seeking opportunities

Managing an evolving landscape

Lower for longer rates DOL Fiduciary Rules

• Fiduciary rules

• Transparency

• Consumer protection

• Management actions

to reduce exposure

• New approach reduces

hedging volatility

• Additional action on expense

base to strengthen path to

achieving targets

• On track for April 1, 2017 implementation

• New fee-based products launched

• Working with key distributors to

strengthen relationships as they transition

• Deepening and expanding retirement plan

offerings for participants with Managed

Advice

Customer & Technology

• Demographics drive strong need

• Behaviors changing

• Technology enabling new solutions

• Innovative and integrated offering

for the worksite

• Enabled by leading-edge

technologies

• Driving operational efficiencies

across the organization

• Low interest rates

• Equity volatility

• Challenging tradition


Accelerating pace and scale of delivery

Committed to our strategic objectives

• Provide omni-channel,

mobile-first

experiences to engage

directly with customers

• Create solutions that

are convenient,

rewarding and relevant

• Allocate capital to

businesses that fit our

strategic direction and

create profitable growth

• Optimize value of back

books

• Invest in capabilities and

expertise to support our ambitions

• Advocate accountability, agility

and customer centricity

• Reduce complexity, drive consistency

and decrease costs

• Create a positive and meaningful

experience for users, promoting

strong relationships


Management team committed to deliver

Clear 5 part plan to optimize performance

1

2

3

4

5

David HopewellChief Product Officer

Dave PaulsenChief Distribution Officer

David MacmillanChief Marketing Officer

Gerard RescignoChief Technology Officer

Blake BostwickChief Operations Officer

Todd FuhsChief Risk Officer

Eoin ElliffeHead of ALM & Hedging

Today’s breakout sessions

In-force managementStarting with Life & Health

Location strategyReduced US geographical

footprint

Efficient organizationFocused and disciplined expense

management

Optimizing the portfolioDisposition of non-core assets

New business & revenueStrategic overhaul of product

offerings & channel positioning

7

• Successful execution of expense savings

• Optimizing capital and improving returns– Increasing monthly deduction rates on certain

Universal Life insurance blocks to remain below

maximum rate guarantees

– Requesting Long Term Care rate increases

– Assessing all Life & Health blocks to identify

opportunities to improve returns on in-force

• Actively developing new solutions to

engage with existing customers– Using Managed Advice to improve the

experience of Retirement Plan participants and

expand revenue generating opportunities

Delivering on 2018 targets

Starting with Life & Health

1. In-force management

In-force

management

Expense

savings

Capital

optimization

Liability

management

Risk

transfer

Retention

Asset

allocation


* Enterprise Marketing & Analytics Platform – incorporating internal and external data sources to drive insight on customer value & journeys

Engaging employers and participants to drive value with digital technology

2. New business and revenue - Worksite

• Strong existing presence - > 6 million

participants and > 40,000 employers

• Integrated worksite offering

combining wealth, health & advice

• Engaging digital interface for

employers, participants and advisers

• Mobile-first technology to enable

cross-selling as we get closer to

customers

• Enables efficient journey by straight-

through processing

Leveraging our position

& new technologies

Employer

Participant

AdviserRetirement

Savings

Life & Health

Advice &

guidance

Funds

Stable Value

Solutions

Best of Breed

external partners

Digital first &

straight-through

processing

Selected

partners

Integrated

Digital

Worksite

PlatformIn-house


Source: 1) Chatham Partners 2) LIMRA 3) SPARK

Competitive advantages at the worksite

Significant growth opportunities

2%

3%

4%

5%

0

1,500

3,000

4,500

6,000

7,500

2011 2013 2015

Voluntary sales (lhs) Market share (rhs)

(Assets USD million, % of sales)

Employee Benefits2

USD 7 billion market

• Double market growth and fastest-

growing amongst top 10

• Broad portfolio of market leading life

and health products

Health

(Assets USD billion, % of assets)

Defined Contributions (DC)1

USD 7 trillion market

• Growing 4 times faster than industry

• Strong competitive position in all sized

plans post Mercer acquisition

0%

2%

4%

6%

2011 2013 2015

0

2,000

4,000

6,000

8,000

DC (lhs) Market share (rhs)

Wealth

0%

10%

20%

30%

2011 2013 2015

0

2,000

4,000

6,000

8,000

IRA (lhs) Retention rate (rhs)

(Assets USD billion, % of rollovers)

Individual Retirement Accounts3

USD 8 trillion market

• Increased retention rate to 19%

• Extending Advice Center capability for

participants

Advice

10

0

50

100

150

200

250

Universal Term Whole

Closely affiliated Brokerage Worksite Other

* Source: LIMRA for nine months 2016


Significant potential to provide Life products to middle America

Opportunities in Life

Market leading positions* Positioned to capture growth

• Reaching fast growing portions of middle market via World Financial Group, the dominant channel for Transamerica’s IUL sales

• Growing life sales at the worksite at more than three times the industry rate*

• New product offerings to enhance competitive position in the brokerage channel

#2 Indexed

Universal Life

Individual

Term Life

11%market share

#5 5%market share

Individual

Whole Life#9 3%

market share

Overall

Individual Life#6 5%

market share

Diverse product & distribution mix

(USD million)

Transamerica Life sales

9M16 sales of USD 421 million


* Includes businesses that are being de-emphasized. Note: Size of bubble represents RBC capital allocated

Rigorous capital allocation

3. Optimizing the portfolio

Run

• Payout Annuities

• BOLI / COLI

• Institutional Spread

• Life Reinsurance

• Affinity, Direct TV/Mail

• Closed Block Variable Annuities

• Fixed Annuities

Sell / Reduce*

Focusing on releasing capital

while managing risks to reduce volatility

Improving returns and capital

efficiency with selected new products

• Stable Value Solutions

• Supplemental Medical

• Term Life

• Variable Annuities

• Whole Life

Grow

Actively invest in growth via digital

integration and distribution capability

• Defined Contribution

• Employee Benefits

• Indexed Universal Life

• Individual Retirement Account

• Long Term Care / Riders

• Mutual Funds


Reduced US geographical footprint

4. Location strategy

BaltimoreCedar Rapids

Folsom

Los Angeles

• Closing 3 offices and

consolidating locations in Cedar

Rapids and Baltimore

• Reduction of >500 roles

• Efficiencies from fewer leases,

lower maintenance and travel

• Improved collaboration and

culture across locations

West Chester

Closing

Consolidating

Closing impact

Consolidation impact

Locations with >100 employees


Disciplined expense management and investments for the future

5. Efficient organization

Cumulative run rate savings

USD millions

2016

~75

2017

~150

2018

~300

• Reducing complexity by transforming to One Transamerica

• Leverage technology to increase efficiency

• Implementation of One Recordkeeping system, including Mercer integration

• Completed voluntary separation incentive plan in H1 2016

• Net reduction of >500 roles announced

– ~800 roles removed

– ~300 new roles created including new skills in advice, digital and marketing

Process

improvements

Sourcing and

third-party

relationships

Ongoing

implementation of new

technologies

Investment in new

skills & capabilities


Doubling expense savings to strengthen path to achievement of targets

Reaffirming 2018 targets

2018 target

View of

delivery by

2018

USD 1 billion USD 1 billion

Reduction in IFRS capital for run-off

Capital generation

USD 300 million 9%

Return on capitalAdjusted operating

expenses

Driving cost

reductions and

growth to deliver

Stable capital

generation

~Dependent on

interest rates and

counterparty risk

Doubling our

original expense

savings target

15Summary

Accelerating execution of strategy

Strong foundation to deliver

Robust

management

actions

Differentiate

customer

experience

Positioning for

the future


16

Appendix



Speakers’ biographies

Mark Mullin

Chief Executive Officer

Mark Mullin has spent more than 25 years with Aegon in various investment and business management positions in both the United States and Europe. Mr.

Mullin has served as President and CEO of one of Aegon’s US subsidiaries, Diversified Investment Advisors, and as head of the Company’s annuity and

mutual fund businesses. He was named President of Aegon Americas in 2009, and became President and CEO of Aegon Americas and a member of the

Management Board in 2010.

Michiel van Katwijk

Chief Financial Officer

Michiel van Katwijk has been Executive-Vice President and Chief Financial Officer of AEGON Americas since 2012. He started his career with AEGON in

1991 and has been in various financial positions closely involved with AEGON’s capital markets activities. In 1999, he was appointed Group Treasurer and

from 2003 to 2005 he oversaw the development of AEGON’s Group Risk Department. Before relocating to the United States to take up his current role, he

was Head of the Corporate Financial Center, which included responsibility for actuarial, accounting and reporting, as well as treasury and capital

management, tax, and investor relations. He holds an MBA from the University of Rochester, New York.

Blake Bostwick

Chief Operations Officer

Blake Bostwick brings a diverse background and unique perspective to his role as Chief Operations Officer overseeing Transamerica’s Protection,

Investment, Retirement Operations, and Administration division. Among his many roles within the company, Blake has served as Chief Communications

Officer, Chief Marketing Officer, and Chief Operating Officer of Transamerica’s annuity, mutual fund, and retirement business. Blake earned his bachelor’s

degree in finance from the University of Wisconsin-Milwaukee.



Eoin Elliffe

Head of ALM & Hedging

Eoin Elliffe is Head of ALM & Hedging at Transamerica and non-executive board member of Aegon Ireland. At Transamerica he leads ALM & hedging

activities for 20+ insurance businesses across life, health, global annuities, pension and retirement plan units. In the global annuities group, he is

responsible for the operations and strategy for annuity books in the US and Japan totaling ~$70 B in AUM consisting of GMIB, GMDB, GMAB and GMWB

products. He previously worked at the Royal Bank of Canada as a senior quantitative analyst focusing on credit and economic capital modeling projects.

Eoin has a Ph.D. in Astrophysics from the University of Glasgow.

Todd Fuhs

Chief Risk Officer

Todd Fuhs has responsibility for the oversight function in his role as Chief Risk Officer role at Transamerica. The CRO role is part of the America’s

Management team and the global risk function. Todd has held various actuarial, risk finance and investment positions at insurance organizations during his

30 year career. After joining Aegon in 2003, he was named the Chief Risk Officer in 2008. In 2010, Todd accepted the Chief Actuary position and

relinquished the Chief Risk Officer role. Since 2013, he has held the Chief Risk Officer – Transamerica position.

David Hopewell

Chief Product Officer

David Hopewell was named Chief Product Officer for Transamerica Insurance Company in March 2016, with responsibility for strategic assessment of

products and markets, product design and market positioning, as well as managing the lifetime economics of Transamerica’s current and past inforce

products through the cycles of economic change and emerging experience. David spent the preceding 7 years as Chief Financial Officer for Transamerica’s

Investments & Retirement division. Prior to his role as CFO he ran Variable Annuity hedge programs for Transamerica. He also consulted for a big 4 firm,

and performed range of roles on both asset and liability side of the balance sheet.



David Macmillan

Chief Marketing Officer

David Macmillan joined Transamerica in 2015 after four years at sister company, Aegon UK. While at Aegon, he was the driving force behind the award-

winning, multichannel digital proposition at the heart of the company’s UK turnaround strategy. David spearheaded the design of the robot-pension, self-

service platform Retiready for the retail and workplace markets and oversaw the launch of the first variable annuity embedded on a wealth platform in the

UK market. David previously worked for Standard Life plc.

David Paulsen

Chief Distribution Officer

Dave Paulsen joined Transamerica in 2007. He is responsible for sales and business development for individual and employer markets. He leads

Transamerica’s broker/dealer wholesaler efforts, as well as its alternative channel and market sales. Dave has more than 25 years of industry experience

and is a driving force behind Transamerica’s innovative product development and retirement product strategies. Dave received his Bachelor’s degree in

Management and Marketing from the University of Nebraska and his M.B.A in Business Administration from Drake University.

Gerard Rescigno

Chief Technology Officer

Gerard Rescigno is Chief Technology Officer for Transamerica. He joined Transamerica in 1997. He is responsible for Transamerica’s overall technology

strategy, architecture, application development and support and IT innovation. Prior to joining Transamerica, Gerard worked at Insurance Services Office

where he focused on system design, development and software architecture for the property and casualty business. He earned a BS degree in Computer

Science from Manhattan College in 1989 and an MBA from Manhattan College in 1994.


Aegonplein 50, 2591 TV the Hague

Telephone: +31 (0)70 344 3210

Postbus 202

2501 CE the Hague

The Netherlands

Thank you!

Aegonplein 50

2591 TV The Hague

The Netherlands

+31 70 344 8305

[email protected]

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21

Cautionary note regarding non-IFRS measures

• This document includes the following non-IFRS financial measures: underlying earnings before tax, income tax, income before tax, market consistent value of new business and return on equity. These non-IFRS measures are calculated by consolidating on a proportionate basis Aegon’s joint ventures

and associated companies. The reconciliation of these measures, except for market consistent value of new business, to the most comparable IFRS measure is provided in note 3 ‘Segment information’ of Aegon’s Condensed Consolidated Interim Financial Statements. Market consistent value of new

business is not based on IFRS, which are used to report Aegon’s primary financial statements and should not be viewed as a substitute for IFRS financial measures. Aegon may define and calculate market consistent value of new business differently than other companies. Return on equity is a ratio using

a non-IFRS measure and is calculated by dividing the net underlying earnings after cost of leverage by the average shareholders’ equity, the revaluation reserve and the reserves related to defined benefit plans. Aegon believes that these non-IFRS measures, together with the IFRS information, provide

meaningful information about the underlying operating results of Aegon’s business including insight into the financial measures that senior management uses in managing the business.

Local currencies and constant currency exchange rates

• This document contains certain information about Aegon’s results, financial condition and revenue generating investments presented in USD for the Americas and Asia, and in GBP for the United Kingdom, because those businesses operate and are managed primarily in those currencies. Certain

comparative information presented on a constant currency basis eliminates the effects of changes in currency exchange rates. None of this information is a substitute for or superior to financial information about Aegon presented in EUR, which is the currency of Aegon’s primary financial statements.

Forward-looking statements

• The statements contained in this document that are not historical facts are forward-looking statements as defined in the US Private Securities Litigation Reform Act of 1995. The following are words that identify such forward-looking statements: aim, believe, estimate, target, intend, may, expect, anticipate,

predict, project, counting on, plan, continue, want, forecast, goal, should, would, is confident, will, and similar expressions as they relate to Aegon. These statements are not guarantees of future performance and involve risks, uncertainties and assumptions that are difficult to predict. Aegon undertakes no

obligation to publicly update or revise any forward-looking statements. Readers are cautioned not to place undue reliance on these forward-looking statements, which merely reflect company expectations at the time of writing. Actual results may differ materially from expectations conveyed in forward-

looking statements due to changes caused by various risks and uncertainties. Such risks and uncertainties include but are not limited to the following:

• Changes in general economic conditions, particularly in the United States, the Netherlands and the United Kingdom;

• Changes in the performance of financial markets, including emerging markets, such as with regard to:

▬ The frequency and severity of defaults by issuers in Aegon’s fixed income investment portfolios;

▬ The effects of corporate bankruptcies and/or accounting restatements on the financial markets and the resulting decline in the value of equity and debt securities Aegon holds; and

▬ The effects of declining creditworthiness of certain private sector securities and the resulting decline in the value of sovereign exposure that Aegon holds;

• Changes in the performance of Aegon’s investment portfolio and decline in ratings of Aegon’s counterparties;

• Consequences of a potential (partial) break-up of the euro;

• Consequences of the anticipated exit of the United Kingdom from the European Union;

• The frequency and severity of insured loss events;

• Changes affecting longevity, mortality, morbidity, persistence and other factors that may impact the profitability of Aegon’s insurance products;

• Reinsurers to whom Aegon has ceded significant underwriting risks may fail to meet their obligations;

• Changes affecting interest rate levels and continuing low or rapidly changing interest rate levels;

• Changes affecting currency exchange rates, in particular the EUR/USD and EUR/GBP exchange rates;

• Changes in the availability of, and costs associated with, liquidity sources such as bank and capital markets funding, as well as conditions in the credit markets in general such as changes in borrower and counterparty creditworthiness;

• Increasing levels of competition in the United States, the Netherlands, the United Kingdom and emerging markets;

• Changes in laws and regulations, particularly those affecting Aegon’s operations’ ability to hire and retain key personnel, taxation of Aegon companies, the products Aegon sells, and the attractiveness of certain products to its consumers;

• Regulatory changes relating to the pensions, investment, and insurance industries in the jurisdictions in which Aegon operates;

• Standard setting initiatives of supranational standard setting bodies such as the Financial Stability Board and the International Association of Insurance Supervisors or changes to such standards that may have an impact on regional (such as EU), national or US federal or state level financial regulation or

the application thereof to Aegon, including the designation of Aegon by the Financial Stability Board as a Global Systemically Important Insurer (G-SII).

• Changes in customer behavior and public opinion in general related to, among other things, the type of products Aegon sells, including legal, regulatory or commercial necessity to meet changing customer expectations;

• Acts of God, acts of terrorism, acts of war and pandemics;

• Changes in the policies of central banks and/or governments;

• Lowering of one or more of Aegon’s debt ratings issued by recognized rating organizations and the adverse impact such action may have on Aegon’s ability to raise capital and on its liquidity and financial condition;

• Lowering of one or more of insurer financial strength ratings of Aegon’s insurance subsidiaries and the adverse impact such action may have on the premium writings, policy retention, profitability and liquidity of its insurance subsidiaries;

• The effect of the European Union’s Solvency II requirements and other regulations in other jurisdictions affecting the capital Aegon is required to maintain;

• Litigation or regulatory action that could require Aegon to pay significant damages or change the way Aegon does business;

• As Aegon’s operations support complex transactions and are highly dependent on the proper functioning of information technology, a computer system failure or security breach may disrupt Aegon’s business, damage its reputation and adversely affect its results of operations, financial condition and cash

flows;

• Customer responsiveness to both new products and distribution channels;

• Competitive, legal, regulatory, or tax changes that affect profitability, the distribution cost of or demand for Aegon’s products;

• Changes in accounting regulations and policies or a change by Aegon in applying such regulations and policies, voluntarily or otherwise, which may affect Aegon’s reported results and shareholders’ equity;

• Aegon’s projected results are highly sensitive to complex mathematical models of financial markets, mortality, longevity, and other dynamic systems subject to shocks and unpredictable volatility. Should assumptions to these models later prove incorrect, or should errors in those models escape the

controls in place to detect them, future performance will vary from projected results;

• The impact of acquisitions and divestitures, restructurings, product withdrawals and other unusual items, including Aegon’s ability to integrate acquisitions and to obtain the anticipated results and synergies from acquisitions;

• Catastrophic events, either manmade or by nature, could result in material losses and significantly interrupt Aegon’s business; and

• Aegon’s failure to achieve anticipated levels of earnings or operational efficiencies as well as other cost saving and excess capital and leverage ratio management initiatives.

• This press release contains information that qualifies, or may qualify, as inside information within the meaning of Article 7(1) of the EU Market Abuse Regulation

• Further details of potential risks and uncertainties affecting Aegon are described in its filings with the Netherlands Authority for the Financial Markets and the US Securities and Exchange Commission, including the Annual Report.

• These forward-looking statements speak only as of the date of this document. Except as required by any applicable law or regulation, Aegon expressly disclaims any obligation or undertaking to release publicly any

updates or revisions to any forward-looking statements contained herein to reflect any change in Aegon’s expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based.


Disclaimer

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